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House panel blocks the Maharlika Investment Fund measure.

The House of Representatives passed a resolution that sought to establish a sovereign wealth fund (SWF) to optimize the profitability of investable government assets for the benefit of all Filipinos.

The House Committee on Banks and Financial Intermediaries agreed and adopted the changes made by the technical working group (TWG) to House Bill No. 6398, which would create the Maharlika Investment Fund, during the hearing on Thursday.

The Government Service Insurance System (GSIS), the Social Security System (SSS), the Land Bank of the Philippines (Land Bank), the Development Bank of the Philippines (DBP), and the National Treasury will each contribute PHP125 billion, PHP50 billion, PHP50 billion, PHP25 billion, and PHP25 billion, respectively, to the fund’s initial funding.

In order to accomplish the goals of the Agenda for Prosperity and President Ferdinand R. Marcos Jr.’s eight-point socioeconomic roadmap, it is crucial for the government to “improve investment opportunities, promote productivity-enhancing investments, and ensure that the Philippines becomes an investment destination,” according to Speaker Martin Romualdez, the measure’s author.

“State-owned investment funds known as sovereign wealth funds are often financed by a nation’s excess revenues or reserves. Governments invest this cash in a variety of physical and monetary assets to balance their national budgets, provide savings to their inhabitants, or spur economic growth, according to Romualdez.

He claimed that the legislation would give the GSIS, SSS, Land Bank, and DBP the chance to ensure that their respective funds’ optimal asset allocation and that resources are effectively directed to investments that will yield the greatest returns for both the participating government financial institutions (GFIs) and the nation at large.

The TWG has put in place enough protections to guarantee that the fund will be appropriately managed and will provide returns to pension funds and government banks.

Three tiers of audit (internal, external, and the Commission on Audit), as well as four layers of good corporate governance, according to Albay Rep. Joey Salceda, head of the TWG, are among the safeguards (in the board of directors, the advisory body, the risk management unit, and the congressional oversight committee).

Salceda stated, “We mandated routine recording of losses and earnings in the accounts, as well as annual reporting by the government financial institutions to their members or shareholders.

Several audit procedures, independent directors, and the Treasurer of the Philippines, who will sit on the board, would verify that there are no shadow accounts or investments, he claimed.

Salceda stated that the Fund’s goal is to increase investments in vital infrastructures, such as dams and electricity, “apart from exposure to the larger upside for the GFIs.”

“The President has stated that he wants the Fund to help with nation-building. Due to the capital-intensive nature of many of these initiatives, the Fund will combine its resources in that direction, he added.

Stella Quimbo, a representative from Marikina City, asserted that the GFIs’ initial participation in the Maharlika Wealth Fund will not have a detrimental effect on the provision of services or benefits to these institutions’ constituents.

According to Quimbo, “their investible funds are separate from the monies designated for benefit payments.”

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